Tashkent, Uzbekistan (UzDaily.com) -- Uzbekistan approved a regulation on opening an individual investment account in the capital market. This was stated by the National Agency for Prospective Projects of the Republic of Uzbekistan (NAPP).

The Government of Uzbekistan adopted a resolution “On approval of the regulations on the procedure for opening an individual investment account and accounting for funds on it.”

The main purpose of the resolution is to regulate the procedure for opening an individual investment account for the purchase of securities issued on the local stock market and traded on the organized securities market.

A special feature of an individual investment account is that, in accordance with Article 378 of the Tax Code of the Republic of Uzbekistan, part of wages and other income of taxpayers sent to this account for the purchase of securities issued on the local market are exempt from personal income tax.

To be exempt from income tax, two conditions must be met:

the amount of wages and other income of the investor (taxpayer) sent to an individual investment account should not exceed one hundred times the minimum wage for the tax period;

these earnings must not be withdrawn from the account for twelve months.

An individual investment account is opened and maintained by an investment intermediary on the basis of an agreement concluded for one year.

The mechanism for opening an individual investment account and keeping records of funds on it occurs in the following order:

the client provides the investment intermediary with a document confirming his identity, as well as a personal identification number of an individual (PINFL);

the investment intermediary enters into a one-year agreement with the client on the opening and maintenance of an individual investment account and opens an individual investment account for the client;

the client sends contributions in the form of part of his salary and other income to an individual investment account;

the investment intermediary ensures the maintenance of an individual investment account and the execution of relevant transactions with securities;

the investment intermediary calculates the tax on investment income on the individual investment account and transfers the net income to the client;

the investment intermediary closes the client’s individual investment account based on the client’s application to close the individual investment account.

The NAPP noted that the introduction of an individual investment account instrument by this resolution is aimed at the further development of the country's capital market, including the formation of additional investment resources in the capital market, the attraction of resources by securities issuers to finance their projects and the receipt of additional income by individual investors.